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comprenensive insurance company nas two product lines: neaith insurance ana auto insurance. I ne two proauct lines are served by three operating departments, which are
comprenensive insurance company nas two product lines: neaith insurance ana auto insurance. I ne two proauct lines are served by three operating departments, which are necessary for providing the two types of products: claims processing, administration, and sales. These three operating departments are supported by two departments: information technology and operations. The support provided by information technology and operations to the other departments is shown below. Support Departments Information Technology Operations 20% 10% Operating Departments Claims Processing Administration 20% 40% 10 50 Information technology Operations Sales 20% 30 The total costs incurred in the five departments are: Information technology $ 608,000 Operations 1,780,000 Claims processing 270,000 Administration 555,000 Sales 650,000 Total costs $ 3,863,000 Required: Determine the total costs in each of the three operating departments, after departmental allocations, using (a) the direct method, (b) the step method (first for information technology going first in the allocation and then for operations going first), and (c) the reciprocal method. (Do not round intermediate calculations. Round final answers to the nearest dollar.) Operating Departments Claims Processing Administration Sales Total $ 0 $ 0 a. Direct Method b. Step Method (Info Tech First) Step Method (Operations First) c. Reciprocal Method $ 0 $ 0
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